I am the CEO of patient relationship management company Avado (acquired by WebMD October 2013), the first cloud-based EHR-agnostic patient portal. I was named one of the 10 most influential people in healthIT and a "healthcare transformer" by the StartUp Health Academy. I have been invited to the White House and presented before the head of Medicare and the Pioneer ACOs. I'm also a co-editor and writer of a book commissioned by HIMSS on patient engagement. Previously, I was a senior consultant in Accenture's healthcare practice and a founder of Microsoft's $2 billion health platform business. I left Microsoft in 2003 to work in startups as an executive to multiple high growth companies. Avado has been featured in the New York Times, Wall Street Journal, TechCrunch, Washington Post, Bloomberg and numerous healthcare industry publications. It partners with EHR vendors to provide a competitive advantage over silo'ed patient portals and was selected by 22 pioneering healthcare providers in New York state for a statewide program pioneering accountable models.

Health Systems Ignore Patients at Their Own Peril

“The most important member of the care team is the patient.” That has been a statement one has heard in healthcare for decades, yet it has never been more important. Why? It is next to impossible to succeed in the value and outcome-based healthcare reimbursement model every private and government payor is driving towards (with or without Obamacare).

In my experience reviewing or implementing over 100 health IT systems, the core purpose of legacy healthIT systems is crystal clear — their job is to get as big a bill out as quickly as possible. Why wouldn’t it? The much-criticized fee-for-service model that incentivizes activity over outcome has driven that outcome. In fact, it would have been irrational for healthcare providers to demand systems that did otherwise. The fuzzy image below is how a patient looks to healthIT systems where it has one point of clarity — the billing codes associated with the patients. That may be good for billing but unfortunately that is at the heart of healthcare’s hyperinflation. Consider that since the 60′s, while all non-healthcare expenditures increased 8x, healthcare increased 274x.

While there is great ambiguity about the future of healthcare, there is one certainty: healthcare will be paid based on some blend of value/quality/outcome and a shifting away from the “do more, bill more” reimbursement model. One can’t overstate the scale of this change and what it means for healthcare providers and the organizations that support them. This will make the shift from analog to digital media look trivial.One similarity to the analog-to-digital media shift, however, is healthcare will also face deflationary economics that will produce many winners and losers.

Who is in control of decisions driving outcomes. Adapted from the Nuka Model of Care.

The graphic above speaks to the importance of the individual (or family) in the care process. There are two curves. One is the degree to which the healthcare system is in control while the other is the degree to which the individual (aka patient) is in control. Clearly, when a patient is in a hospital — perhaps unconscious after an accident — the healthcare system is appropriately in control of the decisions that drive the outcome. In contrast, the situation is different when one is managing a chronic condition which represents roughly three-quarters of all healthcare spending. In those situations, it is the patient who is control. They decide whether they’ll change exercise or diet habits, fill prescriptions, take the pills, and so on. Their actions will be the determinant of the outcome.

The highest performing health systems perform very well when there is the medical equivalent of a big fire. However, it is individuals who are the key player in keeping small fires from growing bigger and fire prevention. Just speaking to the technology side of the equation, health systems have invested massive sums of money to fight the big “fires” that take place in hospitals. The opportunity for healthtech startups today is to develop the equivalent of fire extinguishers, CO2 alarms, keeping fires from reigniting, fire inspections, and better communication systems that snuff out small “fires” or prevent them entirely.

Providers proving the healthcare cost curve can be bent While single digit savings translate into big money in healthcare, there are a few organizations who have had double digit cost reductions and outcome improvements. In earlier pieces, I have highlighted organizations that have had impressive results by developing new care models that truly put patients at the center of their care delivery model.

Healthcare leaders increasingly understand the importance of individuals and behavioral science. Their leaders are continually looking for ways to improve. As word spreads about their accomplishments, others are rushing to replicate their success. For example, organizations all over the world are visiting the SouthCentral Foundation in Alaska where they have demonstrated that it is possible to turnaround even a government-funded health system (Indian Health Service, Medicare & Medicaid provide 95% of their funds). Their “Nuka Model of Care” is a great example of what can be done by any healthcare organization when goals are properly aligned. [See also The Hot Spotters Sequel: Population Health Heroes.] The core insight that has led to truly impressive outcomes has been that for 75% of healthcare spend (chronic disease management), it is the individual or their family who is in control of the decisions that drive outcomes. The graphic below depicts this.

Other health systems have begun with modest efforts to weave in the individual into the care process. Even simple secure messaging has been held up as a great breakthrough in medicine. I liken the limited efforts to invite the patient into the process to seeing a muddy puddle of water in the Sahara Desert — it’s a welcome improvement but far from optimal. The healthcare organizations that will thrive (not just survive) are recognizing that a tweak to systems (both healthIT and business process) that were designed around the patient as billing vessel will fail miserably. As we’ve seen in many areas, tweaks to an architecture designed around a different model never succeed in the new paradigm. If they did, Yahoo or AOL would be the leaders in social media. Before long, you will see the equivalents of Facebook and Foursquare emerge in healthcare.

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This is an incredibly obtuse article. Do you know what you are talking about ? Have you ever cared for a patient ? My patients already decide on their treatment plans, after careful exposition of the options. The “system” is not deciding anything. What a bogus and misleading graph !

And of course there was the obligatory “digital-to-analog” comparison. What next ? Paradigm shift ? Invocation of Moore’s Law ? Any cliches missing ?

The “bogus” graphic was created by an organization that cares for 55,000 lives and is in the 90th percentile of outcomes on various HEDIS measures. The SouthCentral Foundation has also shown reductions of greater than 50% in hospital admissions, specialist referrals, etc. Follow the links in the articles to the article – DIY Health Reform from Massachusetts to Alaska – for more on how they did this. The videos explain in detail the explanation for the “control” diagram.

Such a simple concept, yet overlooked by most suggested solutions to outcomes based healthcare initiatives. Until patients with chronic conditions are motivated to get engaged in their health and comply with their treatment recommendations, all the ihealth apps, EMRs, remote home monitoring solutions in the world will not make any difference in improving patient outcomes and reducing costs. Yes we need technology to find, track and engage these patient populations, but once you find them, how do you get them motivated to comply? And, by the way, my 75 year old Mother In Law with multiple comorbidities doesn’t have an iphone or a computer (and never will)…but she does have a telephone.

The patient is kept so far out of the healthcare loop that cures are no longer being publicized lest salaries be lost. In the mid-90s, I worked out a treatment to prevent 90% of dialysis. The VA’s response, where I worked, was to fire me. The media’s response to my 2002 paper was to ignore it. If patients mattered at all, the 1 million Americans whose deaths I could have prevented would have counted for something, not to mention the millions more overseas. With half a billion diabetics soon in India and China, half of whom will have kidney failure, the news is even more critical to get out: http://trishatorrey.com/2008/05/06/conspiracy-theories-reversing-kidney-disease-and-personalized-medicine/

I’m working on my graduate program in Health Informatics and this issue frequently comes up; switching from a fee-for-service model to outcome based model of reimbursement. Part of the push is for clinical decision support (CDS) and evidence based medicine to track positive outcomes. The problem is that that approach doesn’t take into account the patient’s role as final decision maker and anyone who thinks the final say isn’t up to the patient is way off base. Further, evidence based medicine is a one-size-fits-all approach and really disallows doctors to handle each patient on a case-by-case basis. Everyone is different and responds differently to the same treatment; that has to be taken into account and the place to start is fully engaging the patient and making sure they understand fully what the treatment plan is.